Annuity Payout Calculator
Calculate regular annuity income from a lumpsum amount. Useful for pension planning and understanding payout schemes.
Annuity Payout Calculator
Result
How it works
Formula Used
Payout = PV × [r(1+r)^n] / [(1+r)^n - 1] Fixed annuity payment for specified period
Smart Tips
- Use for pension planning and retirement income
- Compare annuity schemes from different providers
- Account for inflation by choosing appropriate rate
Best Used For
Pension payout calculation, annuity scheme comparison
FAQs
Is annuity a good retirement choice?
Pros: Guaranteed income, no market risk, peace of mind. Cons: Inflexible, money locked-in, inflation erodes value, low returns vs alternatives. Best for: Risk-averse, need certainty. Suboptimal for: Young retirees, long life expectancy.
Should I buy annuity or use 4% withdrawal rule?
Annuity = guaranteed but locked. 4% withdrawal = flexible but uncertain. Best approach: hybrid—buy partial annuity for base living expenses, use 4% rule for surplus. Gives security + flexibility.
Does annuity protect against inflation?
Standard annuities don't. Inflation annuities exist (rare, expensive) with increasing payouts. Better: buy annuity for necessary expenses only (which don't inflate much), keep rest invested for inflation protection.
What if I die before annuity term ends?
Most annuities have survivor options: money goes to nominee or family gets remaining payments. Evaluate option costs. Some guarantee 10-year minimum (if you die in year 3, family gets 7 years).
Embed Tool
Want to add this Annuity Payout Calculator to your own website? It's free and easy!